2016 FC 1154, 2016 FC 1154

[2017] 3 F.C.R. 377 T-757-14 2016 FC 1154 Helen Daley ( Applicant ) v. Attorney General of Canada ( Respondent ) and Privacy Commissioner of Canada ( Intervener ) Indexed as: Daley v. Canada (Attorney General) Federal Court, Tremblay-Lamer J.—Ottawa, September 12 and October 17, 2016.

Privacy — Privacy Act — Judicial review of report of findings issued by Office of the Privacy Commissioner of Canada (OPC), of OPC’s reconsideration decision respecting complaint against Canada Revenue Agency (CRA) — Applicant, lawyer in private practice, occasionally retained by CRA for litigation — CRA investigating individual (accused) criminally prosecuted for tax evasion — Applicant providing other lawyer representing foreign witness in accused’s criminal case with transcript of foreign witness’ interview during CRA investigation — Later learning found to have violated Privacy Act (Act) following complaint filed by accused about disclosure of transcript — Applicant asking OPC to reopen investigation into complaint but request denied — OPC concluding that CRA could not rely on Income Tax Act (ITA), s. 241(3) (

b) as authority for disclosure of taxpayer information in present case; no basis for disclosure of personal information under Act, s. 8(2) — Principal issues: whether OPC breaching rules of natural justice, duty of fairness toward applicant; whether OPC erring in concluding that applicant’s disclosure unauthorized under Act, ITA — OPC not exempt from notifying or allowing third parties potentially affected by decision to make representations — Act, ss. 31 , 33 not displacing common law duty to notify persons who may be significantly, directly affected by decision — Applicant should have been notified, given opportunity to make representations in course of investigation since her conduct under scrutiny, professional reputation at stake — Therefore, OPC violating rules of procedural fairness in not affording applicant opportunity to be heard — Interaction between Act, other Acts of Parliament as contemplated by Act, s. 8(2)(

b) examined — OPC must consider other decision maker’s

interpretation of ITA, s. 241(3)(

b) but record not indicating OPC considering CRA’s position on proper

interpretation thereof — OPC erring in ignoring factual, legal context of proceedings between accused, foreign witness — Thus, OPC erroneously interpreting ITA, s. 241(3)(b) — Application allowed. This was an application for judicial review of a report of findings issued by the Office of the Privacy Commissioner of Canada (OPC) and of a reconsideration decision rendered by the same respecting a complaint against the Canada Revenue Agency (CRA). The applicant is a partner at a Toronto law firm and occasionally retained by the CRA for litigation.

The CRA investigated an individual (accused) who was criminally prosecuted for tax evasion. During the course of pre-trial proceedings, the accused obtained the names of the prosecutor’s witnesses and began contacting and threatening them with legal proceedings. The applicant was retained by the CRA to defend a CRA investigator against the accused’s actions before several regulatory and civil tribunals.

At the request of another lawyer representing a foreign witness in the criminal case, the applicant provided that lawyer with a transcript regarding the foreign witness’ interview during the CRA’s investigation in the accused’s case. Several years later, the applicant learned that she had been found to have violated the Privacy Act (Act) following a complaint filed by the accused relating to the disclosure of the transcript. The applicant contacted the OPC in particular to express her concerns of not having been informed of the complaint nor given the chance to respond to the accused’s allegations.

She asked that the investigation into the complaint be re-opened. The applicant was subsequently invited to submit further information on the public nature of the information transmitted to the other lawyer to whom she had sent the transcript. However, she was later advised that there were insufficient grounds to re-open the complaint investigation and the matter was closed. The OPC concluded that the matter was well-founded. Its investigator found in particular that the information contained in the transcript met the definition of personal information in

section 3 of the Act . The OPC concluded that the CRA could not rely on paragraph 241(3) (

b) of the Income Tax Act (ITA), which authorizes disclosure of taxpayer information in certain conditions, as the authority for disclosure and therefore there was no basis for the disclosure under subsection 8(2) of the Act. As for the reconsideration of its decision, the OPC concluded that it did not have sufficient grounds to re-open the investigation and did not believe that the transcript in question was part of the court record or otherwise publicly available.

It noted the applicant’s concerns on procedural fairness but stated in particular that the investigation and report were limited to CRA’s compliance with the Act . The principal issues were whether the OPC breached the rules of natural justice and its duty of fairness toward the applicant; and whether the OPC erred in concluding that the applicant’s disclosure was unauthorized under the Act and the ITA. Held , the application should be allowed.

A plain reading of the relevant provisions of the Act (i.e. sections 31 , 33 ) did not lead to the conclusion that the OPC was exempt from notifying or allowing third parties who may be otherwise affected by its decision to make representations. The relevant provisions do not displace the common law duty to notify persons who may be significantly and directly affected by the decision. While the report of findings was directed to the CRA, it was the applicant’s conduct, as counsel retained by the institution, that was under scrutiny.

As legal counsel of the CRA rather than an employee thereof, the applicant had a direct and significant interest in protecting her professional reputation and should have been notified and given the opportunity to make representations in the course of the investigation. The report of findings harmed her professional reputation. The applicant demonstrated the minimum prejudice required to trigger the OPC’s common law duty of notifying persons who may be directly affected by its decisions. In addition, the reconsideration letter did not cure the breach of procedural fairness.

The applicant was only invited to submit evidence regarding the public nature of the information

disclosed and was not given a full opportunity to make representations. By the time she was invited to make submissions, the harm hadalready been done. Therefore, the OPC violated the rules of procedural fairness in not affording the applicant the opportunity to beheard. The general interaction between the Act and other Acts of Parliament as contemplated by paragraph 8(2)(

b) of the Act was examined.The OPC should not use that paragraph of the Act to assume authority to administer, interpret or exercise the authority statutorilyentrusted to another decision maker in other Acts of Parliament. At a minimum, it must consider in its analysis the other decision maker’sinterpretation of paragraph 241(3)(

b) of the ITA and its related case law. Nothing in the record indicated that the OPC considered theCRA’s position on the proper

interpretation of paragraph 241(3)(

b) of the ITA. The OPC’s report of findings did not reflect the broadinterpretation of that provision established by the Supreme Court. The OPC erred in ignoring the factual and legal context of theproceedings between the accused and the foreign witness. Furthermore, the OPC’s characterization of the legal proceedings as “damagesarising out of business dealings” was misleading. The OPC thus erroneously interpreted paragraph 241(3)(

b) of the ITA. STATUTES AND REGULATIONS CITED Canadian Charter of Rights and Freedoms, being

Part I of the Constitution Act, 1982,

Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)[R.S.C., 1985, Appendix II, No. 44]. Federal Courts Act, R.S.C., 1985, c. F-7, ss. 18, 18.1. Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 241. Privacy Act, R.S.C., 1985, c. P-21, ss. 2, 3, 8, 29–35. CASES CITED APPLIED: Hill v. Church of Scientology of Toronto, (SCC), [1995] 2 S.C.R. 1130, (1995), 24 O.R. (3d) 865; Dunsmuir v. NewBrunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Privacy Act (Can.) (Re), (FCA), [2000] 3 F.C. 82, (2000), 251 N.R.379 (C.A.); Slattery (Trustee of) v. Slattery, (SCC), [1993] 3 S.C.R. 430, (1993), 139 N.B.R. (2d) 246. CONSIDERED: R. v.

Tiffin, , 136 C.R.R. (2d) 1 (Ont. S.C.); Morneault v. Canada (Attorney General), (FCA),[2001] 1 F.C. 30, (2000), 189 D.L.R. (4th) 96 (C.A.). REFERRED TO: Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339; Sketchley v. Canada (Attorney General), 2005 FCA404, [2006] 3 F.C.R. 392; Re:Sound v. Fitness Industry Council of Canada, 2014 FCA 48, [2015] 2 F.C.R. 170; Canadian Human RightsCommission v. Canada (Attorney General), 2016 FCA 200, 8 Admin. L.R. (6th) 1; Ocean Port Hotel Ltd. v.

British Columbia (GeneralManager, Liquor Control and Licensing Branch), 2001 SCC 52, [2001] 2 S.C.R. 781; Canada (Attorney General) v. Mavi, 2011 SCC30, [2011] 2 S.C.R. 504; Telecommunications Workers Union v. Canada (Radio-Television and Telecommunications Commission), (SCC), [1995] 2 S.C.R. 781, (1995), 125 D.L.R. (4th) 471. APPLICATION for judicial review of a report of findings issued by the Office of the Privacy Commissioner of Canada and of areconsideration decision rendered by the same respecting a complaint against the Canada Revenue Agency. Application allowed. APPEARANCES Robert A. Centa for applicant.

Melanie Toolsie for respondent. Regan Morris and Michael Sims for intervener. SOLICITORS OF RECORD Paliare Roland Rosenberg Rothstein LLP, Toronto, for applicant. Deputy Attorney General of Canada for respondent. Office of the Privacy Commissioner of Canada, Gatineau, for intervener. The following are the reasons for judgment and judgment rendered in English by Tremblay-Lamer J.: I. Nature of the Matter [1] This is an application for judicial review pursuant to sections 18 and 18.1 of the Federal Courts Act, R.S.C., 1985, c.

F-7 of areport of findings issued by the Office of the Privacy Commissioner of Canada (the OPC) and of a reconsideration decision rendered bythe same with respect to a complaint against the Canada Revenue Agency (CRA).

II. Facts [2] The applicant, Ms. Helen Daley, is a partner at the law firm of Wardle Daley Bernstein Bieber LLP, in Toronto, and isoccasionally retained by the CRA for litigation. [3] In 2002, the CRA investigated Mr. Holterman and he was criminally prosecuted before the Ontario Superior Court of Justice in2003 for tax evasion. Mr. Holterman filed a pre-trial motion seeking to quash five search warrants which was granted (R. v. Tiffin, , 136 C.R.R. (2d) 1). Disclosure in the course of the pre-trial motions revealed to Mr.

Holterman the names of theprosecutor’s witnesses and he began communicating with them and threatening them with legal proceedings. [4] The applicant was retained by the CRA to defend Mr. F., a CRA investigator, against Mr. Holterman’s actions before severalregulatory and civil tribunals. She also facilitated the retainer of Ms. T. by Mr. O., a foreign witness in the criminal case against Mr.Holterman. At Ms. T.’s request, the applicant provided her with a transcript of Mr. O.’s interview by Mr.

F. in the course of the CRAinvestigation. [5] In 2013, the applicant learned through a partner at her law firm that she had been found to have violated the Privacy Act, R.S.C.,1985, c. P-21 (the Privacy Act [or the Act]) following a complaint filed by Mr. Holterman relating to the disclosure of the transcript. [6] On July 17, 2013, the applicant wrote to the OPC to express her concerns that she had not been informed of the complaint, norgiven the chance to respond to Mr. Holterman’s allegations. She also noted that she was not an employee of the CRA and that theinformation transmitted to Ms.

T. was public in nature. The applicant requested that the OPC re-open the investigation into thecomplaint. [7] On July 26, 2013, the OPC invited the applicant to submit further information on the public nature of the information transmittedto Ms. T. [8] On September 25, 2013, following the applicant’s further submissions, the OPC advised her that there were insufficient groundsto re-open the investigation and that the matter was closed. III. Decision A. Report of Findings [9] The OPC concluded that the matter was well-founded. Its investigator found that the transcript contained extensive informationabout Mr.

O.’s business relationship with the complainant and his opinions and views about the complainant. This met the definition ofpersonal information in

section 3 of the Privacy Act. [10] To determine whether the disclosure was authorized under the Privacy Act, subsection 8(2) of the Privacy Act had to be read inconjunction with paragraph 241(3)(

b) of the Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1 (ITA), which authorizes disclosure oftaxpayer information for legal proceedings relating to the administration and enforcement of the ITA. The OPC noted that the disclosurehad been made in relation to a civil proceeding for damages arising out of business dealings and concluded that the CRA could not relyon paragraph 241(3)(

b) of the ITA as the authority for disclosure. As such, there was no basis for the disclosure under subsection 8(2) ofthe Privacy Act. [11] The OPC recommended that the CRA remind its criminal investigation staff of the provisions of the Privacy Act and theirapplication in order to prevent future unauthorized disclosures. B. Reconsideration Decision [12] Following a thorough review of the evidence submitted by the applicant, the OPC concluded that it did not have sufficientgrounds to re-open the investigation.

More precisely, it did not have reason to believe that the transcript in question and all of thecomplainant’s personal information contained therein was part of the Court record or otherwise publicly available. [13] The OPC noted the applicant’s concerns on procedural fairness, but stated that the investigation and the report were limited toCRA’s compliance with the Privacy Act and that the report did not make or purport to make findings regarding any other person’s orentity’s compliance with the Privacy Act. IV. Issues [14] This matter raises the following issues: 1. What is the applicable standard of review? 2.

Did the OPC breach the rules of natural justice and its duty of fairness toward the applicant? 3. Did the OPC err in concluding that the applicant’s disclosure was unauthorized under the Privacy Act and the ITA? V. Relevant Provisions [15] The relevant provisions are subsection 8(2) of the Privacy Act and paragraph 241(3)(

b) of the ITA, included in Appendix Aattached to these reasons. VI. Submissions of the Parties A. The Applicant

[16] The applicant first argues that she was entitled to notice of the proceedings because the decision directly harmed her professionalreputation interests. A right to notice arises when an administrative decision will significantly, directly and necessarily affect a person’sinterest. A duty of fairness will almost always apply to decisions that are likely to reflect unfavourably on the honesty, competence orintegrity of individuals in the conduct of their profession. The Supreme Court of Canada has recognized that a lawyer’s professionalreputation is of particular importance to the individual (Hill v.

Church of Scientology of Toronto, (SCC), [1995] 2 S.C.R.1130 (Hill), at paragraph 180). By concluding that the applicant had failed to keep an individual’s personal information confidential andbreached the Privacy Act, the OPC harmed the applicant’s professional reputation.

There is no merit to the intervener’s contention thatthe report was directed solely at the CRA; the applicant’s conduct was the only one at issue. [17] Secondly, the applicant submits that the personal information contained in the transcript was publicly available becausesignificant parts of it had been disclosed in open court in the course of the criminal and civil proceedings involving Mr. Holterman. [18] The applicant further argues that the disclosure was authorized under paragraph 241(3)(

b) of the ITA because the prohibition onthe disclosure of taxpayer information does not apply in legal proceedings related to the administration and enforcement of the ITA. TheOPC erred in concluding that the action between Mr. Holterman and Mr. O. was simply a claim for damages arising out of businessdealings. Mr. Holterman sued Mr. O. because his testimony before the CRA contradicted the terms of the minutes of settlement agreedto between them in 2003. Mr. Holterman therefore sued Mr. O. as a direct result of the administration and enforcement of the ITA. B.

The Respondent [19] The respondent is limiting his intervention to the last issue. He notes that the Privacy Act is a statute of general application andthat subsection 8(2) of the Privacy Act is accommodating of disclosures of personal information authorized in federal legislation. Theoriginal authority to release the information does not flow from subsection 8(2) of the Privacy Act, but from

section 241 of the ITA. TheMinister of Revenue has a wide discretion to disclose information under its own legislation. [20] The plain statutory language of paragraph 241(3)(

b) of the ITA requires some relation between the legal proceedings for whichthe disclosure will be used and the administration and enforcement of the ITA. The OPC’s strict and narrow

interpretation of theprovision indicates no recognition of the broad and liberal

interpretation sanctioned by the Courts. Coherence within the administrationof justice is highly desirable and the OPC should have deferred to CRA’s

interpretation of their own provision to allow for acomplementary and harmonious legislative scheme. C. The Intervener [21] The intervener submits that it did not have a duty to notify the applicant. The mere fact that a non-party’s conduct is referred to orcommented upon in administrative proceedings does not entitle her to notice of the proceedings. The report of findings was directed atthe CRA and the intervener is limited to assessing a government institution’s compliance with the Privacy Act.

The applicant wasreferred to solely in her capacity as an agent acting on behalf of CRA, who vigorously defended her interests in the proceedings.Moreover, the report had no binding consequences and was not made public. [22] The intervener adds that the notice requirements are comprehensively set out in sections 29 to 35 of the Privacy Act. As long asthe notification requirements are complied with, the OPC benefits from a broad discretion in its investigation procedures.

A duty tonotify third parties would have serious practical implications for the conduct of investigations under the Privacy Act and would over-formalize what is intended to be an informal, non-judicial and confidential ombudsman process. [23] The intervener argues that the Courts have held that the legal proceedings referred to in paragraph 241(3)(

b) of the ITA mustrelate to the administration and enforcement of the ITA for the exemption to apply. It was reasonable to conclude that the action betweenMr. Holterman and Mr. O. was not related to the ITA, because it was a legal proceeding for damages arising out of an alleged breach of asettlement agreement between them. The CRA was not an active participant in those proceedings. VII. Analysis A.

What is the applicable standard of review? [24] The applicable standard of review for the issue of procedural fairness is correctness (Canada (Citizenship and Immigration) v.Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at paragraph 43; Sketchley v. Canada (Attorney General), 2005 FCA 404, [2006] 3 F.C.R.392, at paragraphs 53 and 54; Re:Sound v. Fitness Industry Council of Canada, 2014 FCA 48, [2015] 2 F.C.R. 170, at paragraph 35). [25] On the issue of disclosure, the applicant and the respondent submit that correctness should apply, while the intervener arguesthat reasonableness is the appropriate standard.

I agree with the intervener. [26] The issue of the applicability of paragraph 241(3)(

b) of the ITA requires a thorough examination of the facts of the case. Assuch, it is a question of mixed fact and law which presumptively attracts reasonableness (Dunsmuir v. New Brunswick, 2008 SCC 9,[2008] 1 S.C.R. 190 (Dunsmuir), at paragraph 53). I come to the same conclusion upon analysis of the four factors set out in Dunsmuir,at paragraph 64. [27] Firstly, the OPC does not benefit from a privative clause. However, in recent jurisprudence, the absence of a privative clause hasnot been decisive and the reasonableness standard has been applied regardless (Canadian Human Rights Commission v.

Canada(Attorney General), 2016 FCA 200, 8 Admin. L.R. (6th) 1, at paragraph 63). The absence of a privative clause therefore pulls neither oneway nor the other. [28] Secondly, the purpose of the Privacy Act, as stipulated in

section 2, is “to extend the present laws of Canada that protect theprivacy of individuals with respect to personal information about themselves held by a government institution and that provideindividuals with a right of access to that information.” The OPC’s decision under review was necessarily made in pursuit of this purposewhich points to reasonableness as the standard.

[29] Thirdly, the nature of the question is one of mixed fact and law. As stated above, to come to the conclusion that the disclosurewas not authorised under paragraph 241(3)(

b) of the ITA, the OPC had to examine the facts of the underlying cases as well as interpretthe law. There was no extricable question of law. Accordingly, the nature of the question points to reasonableness. [30] Lastly, the OPC operates in a discrete statutory regime in which it has expertise which also points to reasonableness as thestandard of review. The OPC was created for the proper administration of the Act. Its role is, inter alia, to ensure that disclosures ofpersonal information are made in accordance with

section 8 of the Privacy Act. [31] Pondering these four factors, this Court concludes that the standard of review of the OPC’s decision is reasonableness. ThisCourt will therefore not interfere with the OPC’s decision unless it is not transparent, intelligible, and justified or falls outside the rangeof possible, acceptable outcomes in light of the facts and the law (Dunsmuir, at paragraph 47). B.

Did the OPC breach the rules of natural justice and its duty of fairness toward the applicant? [32] As stated above, the intervener argues that all principles of natural justice may be ousted by express statutory language ornecessary implication (Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), 2001 SCC52, [2001] 2 S.C.R. 781, at paragraph 22; Canada (Attorney General) v. Mavi, 2011 SCC 30, [2011] 2 S.C.R. 504, at paragraph 39).

Hisposition is that the notification requirements are comprehensively set out in the Privacy Act and that the Court should therefore refrainfrom reading-in additional notification requirements. [33] I disagree. A plain reading of the relevant provisions of the Act does not lead to the conclusion that the OPC is exempt fromnotifying or allowing third parties who may be otherwise affected by its decision to make representations.

The provisions only state thatthe government institution must be notified, and that no one else is entitled to make representations as of right: Notice of intention to investigate 31 Before commencing an investigation of a complaint under this Act, the Privacy Commissioner shall notify the head of the governmentinstitution concerned of the intention to carry out the investigation and shall inform the head of the institution of the substance of thecomplaint. … 33 … Right to make representation

(2) In the course of an investigation of a complaint under this Act by the Privacy Commissioner, the person who made the complaint andthe head of the government institution concerned shall be given an opportunity to make representations to the Commissioner, but no oneis entitled as of right to be present during, to have access to or to comment on representations made to the Commissioner by any otherperson. [34] This does not in any way displace the common law duty to notify persons who may be significantly and directly affected by thedecision, which was confirmed by the Supreme Court in Telecommunications Workers Union v.

Canada (Radio-Television andTelecommunications Commission), (SCC), [1995] 2 S.C.R. 781, at paragraph 29. That the decision is non-binding isalso of no consequence. In Morneault v. Canada (Attorney General), (FCA), [2001] 1 F.C. 30, at paragraph 2, theFederal Court of Appeal confirmed that a decision’s absence of legal consequences did not bar relief and thus, review by the Court. [35] While the report of findings was directed to the CRA, it was the applicant’s conduct, as counsel retained by the institution, whichwas under scrutiny. The report of findings itself notes: 10.

However, in his letter of complaint to the Privacy Commissioner, the complainant made a clear statement about not wanting topursue a formal complaint against the CRA for Mr. F’s alleged inappropriate use of his personal information in providing thisinformation to Ms. D: “This complaint does not include the acts or omissions of the CRA official, [Mr. F.], as they are presently thesubject of other proceedings.” The investigation into this matter therefore only focused on the complainant’s allegations of unauthorizeddisclosure of his personal information by Ms. D. to Ms. T. … 25.

As such, we recommend that CRA remind its staff in the Criminal Investigations Program, including its legal counsel, of theseprovisions of the Act and their proper application in order to prevent further unauthorized disclosures of this nature. [Emphasis added.] [36] The applicant, however, was not an employee of the CRA, but its legal counsel. As such, her obligations toward the institutionwere different than that of an employee. As a lawyer, it is her responsibility to advise her client about their legal obligations, not thecontrary.

Her interests in the context of a complaint under the Privacy Act are thus necessarily different than that of the CRA. A findingof a violation of the Privacy Act is of limited consequences for the institution, but has wider implications for a lawyer working in privatepractice. In Hill, the Supreme Court of Canada held [at paragraph 177]: …. For all lawyers their reputation is of paramount importance. Clients depend on the integrity of lawyers, as do colleagues. Judges relyupon commitments and undertakings given to them by counsel.

Our whole system of administration of justice depends upon counsel’sreputation for integrity. Anything that leads to the tarnishing of a professional reputation can be disastrous for a lawyer. It matters notthat subsequent to the publication of the libel, Casey Hill received promotions, was elected a bencher and eventually appointed a trialjudge in the General Division of the Court of Ontario.

As a lawyer, Hill would have no way of knowing what members of the public,colleagues, other lawyers and judges may have been affected by the dramatic presentation of the allegation that he had been instrumentalin breaching an order of the court and that he was guilty of criminal contempt.

[37] The applicant therefore had a direct and significant interest in protecting her professional reputation and should have beennotified and given the opportunity to make representations in the course of the investigation. The report of findings harmed herprofessional reputation, as Mr. Holterman attempted to use it to affect the course of another lawsuit he had brought against the CRA,whom the applicant was representing, and start a letter-writing campaign to smear her reputation.

I find that she has demonstrated theminimum prejudice required to trigger the OPC’s common law duty of notifying persons who may be directly affected by its decisions. [38] I am also of the view that the reconsideration letter did not cure the breach of procedural fairness. The applicant was only invitedto submit evidence regarding the public nature of the information disclosed. She was not given a full opportunity to makerepresentations. Moreover, by the time she was invited to make submissions, the harm had already been done.

The applicant onlycontacted the OPC after her partner had learned of the report of findings through Mr. Holterman’s counsel. The OPC’s conclusions hadalready been circulated. [39] I take note of the intervener’s argument that a general duty to notify and provide participatory rights to government employeesand agents would complicate the OPC’s investigations, over-formalize the process and impact its confidentiality. However, the facts ofthis case do not give rise to a general duty to notify third parties.

The applicant’s situation as a private lawyer retained to represent agovernment agency distinguished her interests from those of the CRA in the specific context of the complaint. The OPC violated therules of procedural fairness in not affording the applicant the opportunity to be heard. [40] In light of this conclusion, I do not need to discuss if the applicant should have been interviewed.

However, I will comment thatalthough the OPC has considerable leeway in determining the procedure to be followed in the performance of any duty or function of theCommissioner under the Privacy Act, the applicant, being the only subject of the investigation, it would appear that to gather relevantinformation, she should have been contacted by the investigator in charge of the complaint. C.

Did the OPC err in concluding that the applicant’s disclosure was unauthorized under the Privacy Act and the ITA? [41] To properly analyze this issue, it is important to understand the general interaction between the Privacy Act and other Acts ofParliament as contemplated by paragraph 8(2)(

b) of the Privacy Act. In Privacy Act (Can.) (Re), (FCA), [2000] 3F.C. 82, at paragraph 18, the Federal Court of Appeal held that: In this context, paragraph 8(2)(

b) cannot but be interpreted as being a provision that enables Parliament to confer on any Minister (forexample) through a given statute a wide discretion, both as to form and substance, with respect to the disclosure of information hisdepartment has collected, such discretion, of course, to be exercised in conformity with the purpose of the Privacy Act. ….

But one cansimply not conclude from Parliament’s alleged failure, in paragraph 8(2)(b), to be specific when it clearly intended to be general, thatfederal government institutions cannot be authorized under that paragraph to disclose to other federal institutions personal informationthat, without any express restriction, they can disclose to foreign institutions. In using words of wide import in paragraph 8(2)(

b) of thePrivacy Act and eventually in paragraph 108(1)(

b) of the Customs Act, Parliament clearly left itself a considerable margin of manoeuvrewith respect to its own legislation and took advantage of it. [42] The OPC should therefore not use paragraph 8(2)(

b) of the Privacy Act to assume authority to administer, interpret or exercisethe authority statutorily entrusted to another decision maker in the other “Act[s] of Parliament”. At a minimum, it must take into accountthe other decision maker’s

interpretation of paragraph 241(3)(

b) of the ITA and its related jurisprudence in its analysis. Nothing in therecord indicates that the OPC considered the CRA’s position on the proper

interpretation of paragraph 241(3)(

b) of the ITA, in spite ofdetailed submissions and offers to discuss the issue in person. [43] In Slattery (Trustee of) v. Slattery, (SCC), [1993] 3 S.C.R. 430 (Slattery), the Supreme Court held that theprovision should be interpreted broadly. In that case, the legal proceedings at issue were a matter of bankruptcy. Mr. Slattery had falleninto arrears in paying income taxes, resulting in an investigation by the CRA. The CRA eventually petitioned Mr. Slattery intobankruptcy.

When he died, a trustee of his estate was appointed and it was determined that the estate’s assets would not be sufficient topay what was owed to the CRA. The estate sued Mr. Slattery’s wife, who was thought to be hiding assets on his behalf. The estate soughtthe testimony of two CRA investigators, to which Mrs. Slattery objected, citing paragraph 241(3)(

b) of the ITA. The Supreme Courtstated [at page 445] that at: The connecting phrases used by Parliament in s. 241(3) are very broad. The confidentiality provisions are stated not to apply in respect ofproceedings relating to the administration or enforcement of the Income Tax Act. [Emphasis in original.] [44] It further remarked that both connecting phrases suggested that a wide rather than narrow view should be taken when consideringwhether a proposed disclosure is in respect of proceedings relating to the administration or enforcement of the ITA. [45] The report of findings does not reflect this broad

interpretation. I can only conclude that the OPC erred in ignoring the factual andlegal context of the proceedings between Mr. Holterman and Mr. O. [46] The characterization of the legal proceedings by the OPC as “damages arising out of business dealings” is misleading. TheCRA’s position was that the 2005 legal proceedings related to the administration or enforcement of the ITA because the informationprovided by Mr. O. formed the basis of the criminal charges against Mr. Holterman.

Any legal proceedings calling into question thebusiness dealings that were the subject of the criminal investigation are necessarily directly related to the administration and enforcementof the ITA. [47] In January 2003, Mr. Holterman first filed a legal proceeding against Mr. O. which produced the minutes of settlement betweenthe two parties. At that time, Mr. O. had already been interviewed a first time by the CRA in 2002 in the course of their investigation andthe information provided formed the basis of the charges against Mr. Holterman.

The minutes of settlement re-characterized the businesstransactions between Mr. Holterman and Mr. O. in a way that contradicted Mr. O.’s testimony to the CRA, unbeknownst to theinvestigators. [48] In May 2003, Mr. O. voluntarily gave a further interview to the CRA which produced the transcript at issue in this case. In this

second interview, Mr. O. confirmed his prior testimony to the CRA which contradicted the minutes of settlement. In November 2003, Mr. Holterman launched legal proceedings against Mr. F. In December 2003, he launched further legal proceedings against Mr. O. and Mr. F. Both of these proceedings were stayed in 2004 pending the outcome of the criminal prosecution. [ 49 ] When Mr.

Holterman succeeded in his pre-trial motion challenging the validity of the information gathered to obtain warrants on Charter [ Canadian Charter of Rights and Freedoms ] grounds in 2005, he re-launched his December 2003 proceeding against Mr. O. The statement of claim clearly demonstrates that the information provided by Mr. O. to the CRA is at the heart of the matter between the parties. The OPC ignored that but for the CRA investigation Mr. Holterman would never have sued Mr. O. In my opinion, this is sufficient to meet the connection threshold set out in paragraph 241(3)(

b) of the ITA and interpreted in the jurisprudence. [ 50 ] In light of this conclusion, there is no need to decide if the transcript was public or not. VIII. Conclusion [ 51 ] The application for judicial review is granted. [ 52 ] The OPC clearly misstated the facts of the case by ignoring the context in which the proceedings against Mr. O. were brought, thus erroneously interpreting paragraph 241(3) (

b) of the ITA . Furthermore, the OPC had a common law duty to notify the applicant of the complaint even if she was not a party to it because she had a direct and significant interest in the outcome. The OPC’s report of findings affected her professional reputation as a lawyer and she should have been given the opportunity to make representations to defend her interests. [ 53 ] For the reasons above, the report of findings is quashed and the matter is sent back to the OPC for redetermination in accordance with these reasons. No costs are awarded.

JUDGMENT THIS COURT’S JUDGMENT is that the report of findings is quashed and the matter is sent back to the Office of the Privacy Commissioner for redetermination. No costs are awarded. APPENDIX A Privacy Act , R.S.C., 1985, c. P-21 8 … Where personal information may be disclosed

(2) Subject to any other Act of Parliament, personal information under the control of a government institution may be disclosed … (

b) for any purpose in accordance with any Act of Parliament or any regulation made thereunder that authorizes its disclosure; Income Tax Act , R.S.C., 1985 (5th Supp.), c. 1 Provision of information 241

(1) Except as authorized by this section, no official or other representative of a government entity shall (

a) knowingly provide, or knowingly allow to be provided, to any person any taxpayer information; (

b) knowingly allow any person to have access to any taxpayer information; or (

c) knowingly use any taxpayer information otherwise than in the course of the administration or enforcement of this Act , the Canada Pension Plan , the Unemployment Insurance Act or the Employment Insurance Act or for the purpose for which it was provided under this section. … Communication where proceedings have been commenced (3) Subsections 241(1) and 241(2) do not apply in respect of (

a) criminal proceedings, either by indictment or on

summary conviction, that have been commenced by the laying of an information or the preferring of an indictment, under

an Act of Parliament; or (

b) any legal proceedings relating to the administration or enforcement of this Act , the Canada Pension Plan , the Unemployment Insurance Act or the Employment Insurance Act or any other Act of Parliament or law of a province that provides for the imposition or collection of a tax or duty.